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Economic Growth (3) - Coggle Diagram

- - - - Indirect Spending
        
        E.g. CDC Vouchers
        
        Essentially, increasing others like C component
      - Direct Spending (G component)
        
        E.g. Building MRT lines
    - - Personal Income Tax
        
        Taxing based on people's income
      - Corporate Income Tax
        
        Taxing based on income of company
  - - - To reduce demand pull inflation, reduce GPL
      - Usually happens when at Classical range of AD/AD curve
      - Though it's btr to increase LRAS instead of reduce AD
- - - - E.g. Decreasing interest rates
        
        Perspective of Borrower
        
        Increase expenditures on big ticket items, consumption increase
        
        Rate of return on investments increases, investment increases
        
        Cost of borrowing drops
        
        Perspective of Saver
        
        Rate of return on savings decrease, consumption increases
    - - E.g. Appreciation of Exchange Rates
        
        Increase in price of exports, reduced quantity demand for them, exports decreases
        
        PED>1, as a lot of substitutes. Therefore, price of exports increase, the drop in quantity demanded more than proportional to the increase of price